December 16, 2024 – Where are wealthy Americans choosing to relocate outside the US? In today's Lifetime Planning episode on the Financial Sense Newshour, Jim Puplava speaks with Christopher Willis, Managing Director of Latitude Consultancy, about the rising trend of Americans, including celebrities and affluent individuals, pursuing second residencies or citizenships abroad. They discuss the key drivers of this movement—political uncertainty, safety concerns, and the need for a "Plan B"—as well as the most popular destinations and the processes involved. Featured countries include Malta, Portugal, Italy, the Caribbean, Australia, and New Zealand, highlighting why each of these locations appeals to those seeking global mobility and security, as well as the costs and processes involved in making the move.
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Transcript
Jim Puplava:
Well, the election is over, and one of the trends that we've seen publicly are well-known celebrities that are leaving the United States for political reasons. But there are other reasons that people are seeking overseas residency, a second place to vacation, or even live abroad. And that's the subject of today's show. Joining me on the program is Christopher Willis. He's Managing Director of the Latitude Consultancy. It's a global leader in residence and citizenship by investment. Chris, are you seeing a lot more—we see this in the news—of celebrities? I'm thinking of Ellen DeGeneres, who just left the United States and moved to, I think it was London. But a number of well-known celebrities are announcing they're leaving for political reasons. Are you seeing that trend?
Chris Willis:
Hi, Jim. Yes, absolutely. We're definitely seeing an increase, not just from celebrities, but we're seeing it from people who have established their wealth in the U.S., and they're worried about what the U.S. is going to look like in the new administration. So, without a doubt, the celebrities grab more of the headlines and Ellen DeGeneres is a great example with her move to the Cotswolds in the UK. And very often, they will use it as a political statement to demonstrate that they don't want to be in the U.S. and want to take their their wealth, if you like, outside of the U.S.
The other thing that is often used as a bit of a sounding board for celebrities, but they don't necessarily realize, is how easy or how difficult it is to actually relocate full-time and have proper status. So it's very different from just going over on a holiday. If you are going to stay long-term, then you've got to have the proper status. And I think she has a way, I believe, through her wife. But there are others that may not have that option, and therefore they look at programs like the ones that we do, which is by investment, whether for residency or citizenship, or in some cases, people may qualify through descent via their ancestral links.
Jim Puplava:
Now, one thing that we're starting to see—and I think we discussed this last time we had you on the show—is that for wealthy Americans, they're trying to have a backup plan. So you're seeing second passports, second residencies overseas. Are you seeing that trend accelerate?
Chris Willis:
Oh, absolutely. I mean, since the results of the election came in, it really spurred interest because a lot of people prior to the election were kind of in a holding pattern to sort of wait and see what the results would be. But once those became apparent, people started to contact us saying, "Hey, we had a conversation a few months ago, but now we're ready to start."
And I anticipate that once the inauguration happens on January 20th, we're expecting a slew of executive orders to come out, which again is likely going to trigger a lot of people to say, "Look, I'm not in agreement with the direction that this administration wants to go, so I want to have another option." And to be fair, the smart money did this already two or three years ago.
So the challenge with these programs is it's not like, "Okay, I want to leave, let me go next week." There are months, sometimes years, to get the correct status to be able to properly exit the United States and establish yourself in another jurisdiction.
Jim Puplava:
So a number of things have come out, and I think a lot of our listeners would find this surprising, but on a scale of freedom and stability, the U.S. has fallen further down the list. Is this another reason people are seeking a second residence?
Chris Willis:
Oh, absolutely. I mean, a lot of people who were visible supporters of the Democratic Party are concerned, and there's actual fear in some people that there's going to be some sort of retribution.
I guess the concept being, if you're not with us, you're against us. And that's generated a sentiment of fear and worry amongst people who were visible supporters of the Democratic Party and the Kamala Harris campaign.
So, a lot of them are looking at these options because they need to have—some of them call it an exit plan or an exit route—just in case the tide turns. And there are some concerns about the safety and well-being of them and their family.
So that surprised me a little bit, that that fear was quite a significant factor. And going back to the safety and security aspects someone who's been born and raised in the U.S., generated their wealth in the U.S., feels at home in the U.S., they're very concerned that they now have to be concerned that someone might take offense to their views and could cause harm to them or their families.
So it surprised me the amount of people who use that word "scared." There's fear. That really surprised me. But the rest of it is just the general temperature of people in the United States. There seems to be a little bit of edginess. Some people are concerned, I think, with the executive orders that are expected after the inauguration.
Jim Puplava:
Another thing. What role did COVID play in this? I know when COVID came around and we were going into lockdowns, depending on what country was following protocol, a lot of people were also seeking overseas residency because of COVID. Is that still playing out?
Chris Willis:
Yeah, I think what it did—I mean, COVID really exposed a lot of families who thought they were prepared for most eventualities. And then during COVID, you recall, you had a temporary travel ban for American passport holders.
And so even though that was relatively short-lived and it's corrected itself now, what it showed is that it happened once—could it happen again? And therefore, a lot of the people with this profile, they're used to traveling, and they're not used to having restrictions on their ability to travel.
So by having a second residence or citizenship, it would allow them to use that secondary citizenship as a travel document when Americans were restricted from traveling to places like Europe, Singapore, the UAE—so places where they typically want to go.
That was the—it exposed the need to have a second option, just in case. You'll recall I probably said last time, it's the usual adage: it's better to have it and not need it than need it and not have it. Right.
And that's where a lot of family offices were in touch saying we need to plug this gap and cover this space off because the families don't want to be exposed in case this should happen again.
Jim Puplava:
I have a couple of clients—oh, this was probably about a decade ago—that moved to Costa Rica. They found it cheaper to live. And then recently, I'd like to get your thoughts on this—I have two clients. One is buying a second residence in Italy to get out of the heat during the summer because they're in Arizona, and then another one is thinking of moving there completely. What are the advantages of Italy, other than it's less expensive?
Chris Willis:
Yeah, I mean, Italy's a wonderful country. One of my favorite, favorite places to visit—not to mention the great food as well. But it's a place that a lot of people have either a cultural link to. We notice a lot of people with Italian heritage in the United States, and it's just a nice quality of life.
For me, if you're outside the major cities, it's a wonderful place to be. People are looking at a bit of peace. And so they look at places like Italy, Portugal, for example, as somewhere where they can go and feel relaxed and safe.
The concept of going for good does require some more planning to make sure that you have the proper status to be able to do so. But they can still buy a property as a foreign national. If they're going to spend, say, the summer—spend three months a year—they're entitled to do that as U.S. citizens.
But what we've seen, Jim, as a major increase of inquiry, was the European citizenship program in Malta. And the reason this has been very popular is by acquiring citizenship in Malta, you then have settlement rights across all the European Union member states. So it's very much a case of 1 equals 27.
And so you could get your citizenship in Malta, and then with that European citizenship, you can now move to Italy, move to Portugal, move to Scandinavia, move to Ireland. People are looking for places that speak English, that are safe, and where they would be comfortable spending a greater amount of time.
So that's where the concept of 1 equals 27 is very powerful. And because it's a citizenship, it's for life, and you can pass it on to your kids. So the family offices love this because for succession planning and all of that, it does give a lot of opportunity.
We have others that have kids that are maybe studying in Milan, and then they say, "Well, what happens when they graduate?" Oh, they're a citizen. They can just go and work and continue their European experience. So everyone has their own reasons.
But the Malta program for those reasons I just explained, is extremely popular. You can get that in about 18 months' time, and you would have your residence card usually within about three months. So what it gives is an immediate solution of status, which is your residence card in Malta, and then you have to wait another year to be eligible for citizenship.
But the overall time of about 18 months is actually quite quick compared to other programs. For example, in Portugal, it'll take a couple of years before you get your residence card, and it's about a seven-to-eight-year journey before you would get your citizenship. So there are pros and cons for each. But the fact that Malta is quick and it gives you European citizenship is very, very popular with many people.
Jim Puplava:
And Chris, that doesn't exclude you from filing U.S. income taxes.
Chris Willis:
No, it doesn't. That's one of the one of the things you're sort of stuck with, if you like, for the moment, unless there's other changes on this. But no, you still have to file.
There's no exposure in Malta to pay taxes unless you either generate income in Malta or you spend more than 183 days a year in Malta. So that's your only exposure to Maltese taxes if that was something you were looking to do.
But in most cases, people are benefiting from the citizenship and then using that to spend time—some of it may be in Malta, but in other European jurisdictions. But you're still having that situation where you still have to file in the U.S. unless you renounce.
Jim Puplava:
And Chris, how complex does this get? In other words, are any of these areas—whether Portugal, Spain, Greece, Switzerland—are you required, let's say I spend six months in Switzerland or, let's say, Greece or Portugal, am I required to pay Portugal or Greece income taxes? And if I do, is there some kind of swap or exemption against my U.S. taxes?
Chris Willis:
Yeah, it would come down to tax on worldwide income, which I believe—and just full disclosure, I'm not a tax specialist, I'm an immigration guy. So, but yeah, it would depend on what tax treaties are in place.
But also, are you even generating income? One, and then two, are you triggering yourself by doing that six months and a day, which would technically make you a tax resident? But if you're not generating income, then you don't have to file. It's that type of concept.
And then for the other jurisdictions in Europe, it's a similar model. It's that 183 days per year—where is your permanent place of residence and therefore your tax domicile?
So these are conversations that we encourage our families to look at with their tax advisors just to make sure that they're not exposing themselves to anything unnecessary in the United States. But there's typically not a lot of tax benefits because you still have to file as an American.
Jim Puplava:
Now, most of the popular places you've talked about that people are seeking are in Europe and the Caribbean. Why Europe and the Caribbean?
Chris Willis:
Well, Europe, I mean, people will look as a comparable—if I was going to renounce my American citizenship or I wanted to spend time out of the U.S., what's comparable in terms of lifestyle, in terms of healthcare, in terms of a variety of factors? And Europe is the clear sort of winner, if you like.
The Caribbean is popular because it's less expensive, it's quicker to process, and it's a direct pathway to citizenship. So for the people who want an actual citizenship as opposed to residency, then it's a logical solution.
People in the U.S. are very familiar with the Caribbean. Most have traveled there before, and geographically it's not that far. If they have to spend some time, or they wanted to go spend some time to exit from the U.S.
But we're seeing interest in Australia and New Zealand, which always, more for the West Coast folk, is popular. But it does require time to maintain your residency. You have to do a certain amount of time, and if you don't, you could lose your residency.
So for people who want it just in the back pocket, Australia is maybe not the solution if they're not going to do the time to maintain their residence. But with the Caribbean programs, citizenship is for life. You've got it, and then you can use it as and when you need it.
Jim Puplava:
Now, there are a lot of pros and cons to this. I wonder if you could just go through some of these countries in terms of the upfront investment cost or the pathways to citizenship.
Chris Willis:
So I'll start with Malta, being the most popular, which is also the most expensive. Without sort of commoditizing it too much, you do get what you pay for, right? So it's going to be around about a million euros, which is non-recoverable, and that allows you to get citizenship in about 18 months. You need to spend about three weeks minimum in Malta during that 18-month period, and that's broken down throughout the process. But that's your commitment.
If you look at Portugal, for example, it's a minimum €500,000, which goes into either a venture capital or a private equity fund. So you would expect a return of your capital after anywhere between four to seven years, depending on the fund that you select. But the downside with Portugal is the processing. So it's going to take at least two years just to get the residence card, which is the Golden Visa—like a green card, however you want to phrase it. And then there's a period of five years that has to elapse before you can be eligible for naturalization and to become a citizen.
So as a result, you're looking at it being about a seven-to-eight-year journey. So you're sort of trading off costs for speed, if you like. For a lot of the wealthy families that we work with, if they have the ability to pay for Malta, it's a no-brainer for them because they want the speed of citizenship and therefore the access to the European Union.
So in terms of the European context, those are the two most popular. Spain's just about to close its program, so we're not really promoting that as a jurisdiction. Greece is popular, but the downside with Greece is you make your investment, but you have to maintain that to maintain your status. So if you bought a property and then sold it, by selling it, you lose your resident status. There's no pathway to citizenship under their Golden Visa program.
So for some people like in the United Kingdom, for example, post-Brexit, a lot of Brits like the Greek program because they don't need citizenship, but they just want access to Greece and having a European footprint. So they like that program, and they like the Portuguese program.
But then in the Caribbean, the power or the strength of the passport is less than what it is with the European Union. European Union passports give you visa-free access to 190-odd countries, give or take, whereas the Caribbean tends to be in the 150-160 range.
So for the American, it's not so much for mobility or access to the world because you can already get that as an American. But if you were from a country like Nigeria or South Africa or Lebanon, where you're very much restricted with your travel, the mobility becomes much more of a relevant factor.
So you could have, let's say, for example, a Venezuelan citizen in the United States on a green card. They're still traveling on the Venezuelan passport, so they may say, "Hey, let me get a stronger passport for travel purposes while I'm waiting to get naturalized in the United States. I can still stay here on my green card, and then when I'm naturalized as a citizen, I can have the extra citizenship with the United States."
So everybody's case, Jim, is quite different. And so that's where we have to sort of understand what their needs are, and then we can recommend which programs would be most suited for them.
Jim Puplava:
Now, a lot of what you do to get citizenship is based on investment. Countries are going to give you citizenship—they want to know you're going to be productive, you're going to contribute to the economy, hence these investments. But let's talk about lineage. For example, my own family—my parents were born in Europe, so I would have lineage.
Chris Willis:
Yeah, I mean, it depends. It depends on the country. Italy, for example, doesn't have a limit of generations, but we have to be able to prove it, right? So it's one thing to say, "I've got a great grandparent," but if we can't demonstrate the lineage, then they can't approve it.
So what we do is we go through, we look at all the lineage, and we work with genealogists if we need to, to see if we can document and demonstrate this pathway to show the ancestral links.
In countries like Ireland, for example, it only goes as far as grandparents. So there is a cap in terms of how far back it can go. So it'll vary from country to country. And we can certainly explore this to see where you might have eligibility.
And on this, Jim, there are also unique opportunities for people in the Jewish community where they may have ancestors that were displaced through persecution. So predominantly Germany, Austria, Poland—they've got programs that can recognize this, and that could be an opportunity for people who can demonstrate that they were displaced.
So like anything else, we have to look at everybody's background and see where they may fit in. And just as a side note, I remember we were talking to a client who was very interested in Malta, and they had an Italian-sounding surname. So we explored the descent a little bit with them and found out they were actually eligible for Italian citizenship through a grandparent. So they were happy because we saved them north of a million euros by not having to do Malta, and they still got the end benefit, which was a European Union passport.
Jim Puplava:
So when does this make sense—to get a second citizenship? As I mentioned earlier, I had a client a little over a decade ago who moved to Costa Rica for a cheaper cost of living. I have two clients right now that are both thinking of purchasing places in Italy—one to live there and one to summer there.
Chris Willis:
I always say, if you qualify today, don't wait too long because you might not qualify tomorrow. There's enough examples of changes of governments, changes of policy, that make you ineligible.
And so we're seeing that. When the United Kingdom had their Tier 1 investor program, they closed it the next day. Ireland did the same with their Immigrant Investor Program.
So in St. Kitts and Nevis, we saw them double their investment levels overnight. So we do encourage people—there's nothing worse than saying someone comes back to you a few months later and says, "Hey, I'm ready to start," and we have to say, "Well, sorry, but you don't qualify anymore, or the cost has increased," or whatever the case may be.
So if it's something that people are serious about doing, they need to factor in there is a time component to this that has to be prepared for. It's not an overnight solution. It can take months, sometimes years.
So it's all part of careful planning and that's why we do a lot of work with family offices to have this planned out and mapped out. So there's benefits for the family principals, but also for their family members.
So that's sort of my recommendation. If you can do it and you're serious about it, don't delay too long.
Chris Willis:
We have to go through quite a significant due diligence verification process—on the applicant's personal background as well as the source of wealth and source of funds. All of that will be verified to make sure that they're genuine applicants and that there's nothing that would bring disrepute or reputational risk to any of these jurisdictions.
Jim Puplava:
Chris, when does this really make sense for somebody to pursue this avenue? Like I mentioned, one client went to Costa Rica—it was a cost-of-living issue. And then the two clients that are considering Europe, it’s basically also kind of economic—it’s cheaper to buy a place there or live there. So once again, it’s economics.
Chris Willis:
Yeah, it’s economics. And I think it’s also a bit of safety as well, and just having a different experience than what they’re maybe used to in the United States. I mean, life in Europe is quite different in many aspects.
And so some people embrace that, and they want their kids to get the experience of living in a different culture, maybe learning another language and everything that goes with it. But it’s, again, personal preference, Jim.
Once we understand what the key motivator is—if it’s safety, cost of living, education, healthcare—there’s a variety of different things. Even the gun culture. That’s an issue for some people. When they look at how this is dealt with in the United States versus in the European Union, they’re sort of polar opposites.
So some people say, "Look, I’m more comfortable in a society that’s maybe less focused on a gun culture than what you have in the United States." And then factoring in other elements, like potential government overreach—people are worried about their assets. They may say, "Hey, why don’t I invest outside of the U.S.?"
Let’s use property as an example. Instead of them buying a place in South Florida, they may say, "I’m going to buy a place in the Caribbean or in Europe, and I will use that purchase as a qualifying investment to gain economic citizenship or residency."
So they get a two-for-one benefit there, if you like, by combining the divestment of some assets out of the U.S. while also getting the citizenship or residency thrown in.
Jim Puplava:
So if you didn’t want to get a second residency or, let’s say, a second citizenship—you just want to do what my one client wants to do, which is buy a place in Italy to summer there. How hard is that to do?
Chris Willis:
Well, it’s usually, I mean, relatively straightforward. It typically would be a cash purchase because you wouldn’t be getting bank mortgages and stuff in Italy without status. And then you’ll probably have to pay some extra costs—closing costs—by not being a citizen.
You know, in the Caribbean, they call it an alien landholding tax, which typically adds 10% to the purchase price. So there are pros and cons on that side of it as well.
But again, if they only wanted to summer there, then maybe that’s the right fit, and they don’t have to go down the residency route.
What we have to make sure we explain to people is that if you are going to buy a property, you may be eligible. So let’s explore that. And if they are, then they may say, "Well, okay, just for the sake of a little bit more, I’m getting a residence card as well." That gives them a little bit more peace of mind that if they decide they want to stay longer, they don’t have to worry because they’ve got the permission to be able to do so.
Jim Puplava:
If you were to boil it down to, let’s say, two or three key things that somebody should consider before making a decision like this, what would those be?
Chris Willis:
Well, I think the key thing is making—some people call it a non-traditional insurance policy, a Plan B, however you want to position it.
But it is that peace-of-mind element of knowing that you’ve got it should you need it. Because there is this concept of concern about what the next four years may look like. And so that’s where people are getting a little bit—well, they’re looking more seriously at this.
Because four or five years ago, there was no need. The U.S. market has really increased in the last four or five years. Certainly with the first Trump administration, followed by COVID, and now the second Trump administration—it’s becoming a lot more part of the conversation of what people are looking at.
So it’s making sure, A) Is this what you want? Do you want to have that extra option? I talk about options because the more options you have, the better prepared you’re going to be if things go sideways.
But also, don’t leave it too long because rules can change, and you may decide, "I need this option now," but it might take 18 months before you have the ability to do it.
So you don’t want to leave it too long and then find out you’ve regretted waiting because—as I mentioned earlier—the smart money’s done this already. They’ve got, in many cases, several options just in case they need them.
Jim Puplava:
All right. Well, listen, Chris, as we close, do you want to give out your website if our listeners would like to find out more about the kind of work you do in assisting people with their citizenship?
Chris Willis:
Yeah, absolutely. It’s latitudeworld.com, and on there we have breakdowns of all the different programs and how everything works. So it’s a great starting point.
And then under the team page, my details are there. You can reach out, and we can arrange to have a one-on-one conversation to better understand your motivations and your needs. Then we can make some recommendations in terms of what programs would be best suited for you.
Jim Puplava:
All right. Well, listen, once again, thank you for joining us on the program, and happy holidays to you.
Chris Willis:
You too, Jim. Thanks again. Always a pleasure to talk to you.
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